John O'Mahony (Mayo, Fine Gael)

Yes, and I thank the Ceann Comhairle. I welcome the opportunity to speak on the Finance (No. 2) Bill which, in effect, is legislation to implement the jobs initiative announced some weeks ago. We consider these as an early attempt to tackle the biggest fallout from the mismanagement of this country and its finances during the past ten years. I refer to the unemployment crisis of the past two years and the growth in the number unemployed to some 450,000. Although everybody, including the Minister and the Government, acknowledges this is only a beginning, just a small part of an overall answer, at least it is a signal of hope that, compared to the last Government, this Government is not merely trying to fix the banking crisis but is trying to stimulate employment.

This jobs initiative will create an environment where businesses should find it cheaper to employ people and where apprentices can find a way of finishing their training. Tourists will find it cheaper to travel to the country and when they arrive they will find it cheaper to stay in excellent accommodation and eat in our excellent restaurants. They will find it cheaper to access and enjoy the wonderful entertainment, music and art we saw so successfully paraded in the past week.

We had the most successful ten days of marketing Ireland to the outside world that ever took place. I compliment our President, our Taoiseach, members of our Defence Forces and the Garda as well as many community groups. I especially include the GAA for the part it played. This country played to its strengths in the past week. Although the visits of the Queen of England and President Obama came at some cost to the State, that cost is minuscule compared to the free advertising we received during that period. Today I heard an expert analyst suggest it was worth €23 million of free tourism marketing.

It is very appropriate, therefore, that the jobs initiative and the Finance (No. 2) Bill appear at this time because they will help to maximise the impact and effect of those State visits and go some way to reverse the downturn in the numbers of tourists in recent years. There was a 13% decline in 2009 and a cumulative decline overall of 25% between 2007 and 2010. During those three years there was a 32% decrease of visitors from Britain.

Some of the above measures have been criticised because they were not introduced on a permanent footing. I note the contribution of Deputy Daly who stated that the travel tax measure does not quantify the numbers of extra tourists it will deliver. However, I believe it does because my reading of the jobs initiative is that if the measure is not successful by the end of 2012 the tax will be reintroduced. It is important to look to the future, to see if the measures deliver the result they are supposed to. It will be a strength of these measures that they do so. If they do not deliver other measures can be considered.

It is important not only to set targets but to see that the results measure up. I refer again to the jobs initiative and the free marketing for our country in the past ten days. It was disappointing to read in today's newspapers that Diageo is to reduce its workforce, especially within the marketing area, after the quantity of free advertising it received in Dublin, Moneygall and throughout the country during recent days. There is never a good time to announce job losses but this announcement was particularly ill advised and inappropriate at this time. Perhaps President Obama and the Queen should be offered a pint of Beamish or Murphy's when they come again, as we hope they do. On a more positive note I welcome the announcement last week of 200 new jobs at construction stage and 100 permanent jobs in Killala, County Mayo, with the granting of planning permission to Mayo Renewable Power for a biomass-fired power station. I hope this will be the first of many announcements in the energy sector in County Mayo in the coming months and years.

I refer to the section of the Bill that relates to the research and development tax credit and I welcome the changes proposed. I encourage the Minister to do even more in the end-of-year budget. Increased budgets for research and development will produce more jobs, so it makes sense to make it easier and cheaper to carry out research and development. I understand that Dr. Dick Kavanagh of the Industry, Research and Development Group has made a number of proposals in this area. These include increasing the tax credit rate from 25% to 35%, encouraging greater company-third level interaction and better utilisation of college resources by increasing to 25% the spend allowed, and encouraging company to company interaction by increasing the amount allowed to be subcontracted to 66%.

In this area, I ask the Minister to ouitline his intentions with regard to the provision in the last Finance Bill, which abolished income tax exemption on royalties payable on patented inventions for which substantial research and development was carried out in Ireland.

This was one provision which encouraged research and development in Ireland more than any other initiative during the past 38 years since it was introduced by the then Minister for Finance, Richie Ryan. It was amended over the years to remove abuses that had been highlighted but it was tax legislation that encouraged genuine investors to take risks and to try to come up with inventions which had commercial potential. It is my contention that we should not have thrown out the baby with the bath water. We should get rid of any abuses by all means but we should not withdraw the support and incentive when it is most needed.

The proposal of the industry group in this case is to encourage patents. Individuals named on a full patent should be entitled to an annual tax free royalty payment up to a maximum of the previous year's gross salary and subject to a 12.5% income tax charge. I am aware of a couple of companies in my constituency that are severely affected by the changes in last budget. I encourage the Minister to make some movement on this issue. In addition to welcoming the plan to review the affects of the abolition of the travel tax, it is vital to examine and check if the reduction of the VAT rate to 9% is being passed on to the consumer by the various sectors and services involved. It is in everyone's interest that this takes place because the more people and tourists who walk through the doors of restaurants, hotels and entertainment venues, the more money will be spent and the more profit made by those providing the services. If the lower rates are not passed on it will have the opposite affect.

I make a final appeal regarding the jobs initiative, which, despite the best efforts of some Members of the Opposition, has been welcomed. Many Deputies will have received many inquiries in their clinics and offices on how to apply for this or that. I appeal for an easy-to-follow, simple guide that uses understandable language and which is produced such that members of the public and businesses are aware exactly of what they must do to apply for specific training courses, skills training, internship schemes, the retrofit scheme or whatever.

I call for this is because of the following communication which I received some days ago from a constituent. I will read it out but I will leave out the names. It is from a heating and plumbing contractor:

I wish to outline our recent experience in trying to give a redundant apprentice employment and the problems we have encountered. An apprentice contacted this office seeking employment and spoke to me explaining his plight in being a phase five apprentice and redundant, unable to finish his training. We offered him work on a three-day week trial basis and we were in touch with the FÁS office No. 1. The forms were duly filled up and all of that went on but the forms had to be passed on from one FÁS office to another to another; there were three FÁS offices involved.

Eventually, he was informed that it was not accepted because he started work before the forms were completed even though the apprentice and the company followed the guidelines to the letter. The company was given the wrong forms but acted in good faith. From an employer's perspective there have been three FÁS offices involved and this delayed the matter. The letter continues:

The apprentice was informed prior to contacting us of the need to ring around for work and get the employer to complete the change of employer form. This is what he did. Should FÁS not be advising their apprentices not to accept the work until they are accepted on the scheme? We are willing to employ this apprentice but are receiving no help and support to do so. How does this fit into the Government programme? As a small business employing staff we are fully tax compliant. Is there any incentive or simple assistance to grow my business and employ staff within this sector?

I point this out as part of the frustrations. All the people in the FÁS offices were very helpful; I am criticising the system. My appeal is that this would be helped a good deal if there were simple rules and language to follow.

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